RMA shake up – the biggest yet?

The Government’s commitment to a thoroughgoing reform of the Resource Management Act (RMA) is most welcome as there is much room for improvement.

The RMA model is for high public participation but too often the reality is paralysis by analysis and deliberate time-wasting. There is an enormous investment in RMA policy statements and plans yet RMA decision making is lacking in overall strategic direction. The RMA struggles to prioritise important national objectives such as meeting the demand for new electricity generation or managing the growing pressure on New Zealand’s natural resource base.

This Counsel looks at the reasons the RMA is failing and suggests some positive practical changes.

History shows the RMA is a difficult piece of legislation to get right. There have been five rounds of reforms already, one by every government since the Act was introduced in 1991. Environment Minister Nick Smith is aware of the size of the challenge. He has described fixing the RMA as “a difficult and complex job” requiring “care and finesse”.

We are encouraged, therefore, that the Government has signalled that it will establish a working group to test and seek feedback on the intended RMA reform package prior to its February 2009 introduction.

National has identified 20 specific amendments. These have two main themes:

to provide a greater degree of central direction; and

to reduce the bureaucratic costs, delays and uncertainties inherent in the present framework.

We agree with National’s broad policy direction.

Better central direction

New Zealand has pressing energy and other infrastructure deficit problems. For instance, we need 150 to 200 MW on average of new electricity generation each year every year between now and 2025 if we are to keep pace with demand growth.1 Further, the Government is looking to boost infrastructure investment as part of a stimulus package to ease the economy through tough times.

Both will require much more effective government leadership in determining resource management priorities. This need is not new. It was a fundamental driver of the 2005 RMA Amendments. These sharpened the three key instruments for central government direction in the consenting, policy and regulatory aspects of the RMA – "call in", National Policy Statements (NPS), and National Environmental Standards (NES).

The Clark Government used call in to fast-track Transpower’s North Island grid upgrade, Contact Energy’s Te Mihi geothermal power station, and wind farm proposals from Contact Energy and Unison Network. It issued an NPS on electricity transmission and opened for public submission proposed NPSs on renewable generation and fresh water management. It completed NES on air quality, human drinking water and telecommunications facilities and began development of an NES on transmission infrastructure.

National, however, considers that the RMA structure is still too devolved. It is proposing to strengthen the centre by establishing an Environmental Protection Authority (EPA), although this will no longer be part of the Bill to be introduced in February. Smith has indicated that the EPA will be a neutral agency rather than an advocate for the environment. It will absorb the functions of the Environmental Risk Management Authority (ERMA) and will assume responsibility for NPS, NES and for the call in of national significance projects.

We expect that the EPA will also be central to National’s intended second stage reforms, for example in water allocation.

The proposed EPA’s success in increasing the effectiveness of the Government’s influence in RMA administration will depend on three critical ingredients:

respected leadership

strong in-house experience; and

ears that are well attuned to what’s happening at grass roots out in the provinces.

It is encouraging that Smith appears to recognise that the EPA will need to have these attributes. His plans include recruitment of expert RMA staff from territorial authorities and regional councils and establishing an EPA presence in Auckland and Christchurch, as well as Wellington.

Nor does the Government need to hit the pause button while such reforms go through. In fact, it is important that it does not.

In parallel with the reform process, a programme of NPS and NES can and should continue apace. Likewise, there should be no loss of enthusiasm for use of call in while we await the EPA and its new call in responsibilities.

There are some technical workability issues to be addressed in relation to the NES and direct referral provisions, but we consider that very little else is needed by way of the first 100 days’ reforms to ensure the Government can deliver effective central direction and leadership.

The focus should rightly fall on how these tools are used. As responsible government agencies have themselves pointed out, there is a need to deal with a lack of “overall strategy for the use of these powers”.2 English’s role as Infrastructure Minister is promising in this regard.

Dealing to RMA process slop

Reducing the RMA “process slop” and associated costs, delays and uncertainties is a realistic objective for the first 100 days’ reform Bill. In our view, such reform is possible without endangering the fundamental principles of the RMA, including its focus on public participation and on sustainable management outcomes.

But the emphasis of the reform must be on achieving an enduring step change in the administration of the RMA rather than “quick fix” solutions that prove superficial and misdirected.

For example, National’s proposal to “fix” vexatious objections and use of the RMA to stifle trade competition by amending the RMA’s definition of “environment” so as to limit it to natural and physical resources could make it harder to justify major infrastructure projects. This is because the reference to “people and communities” in the presently broad meaning of “environment” allows consideration of the national socio/economic benefits that such projects often rely upon for achieving resource consent.

Much of the unnecessary cost and delay in the present system stems from the variable quality of first instance decision-making and the access to de novo rights of appeal. In combination, these create a tendency for people to go through the motions at the first instance hearing while holding their fire for the appeal.

Call in is a model of a single quality hearing on the merits, with appeals confined to questions of law. Call in itself must remain as an important tool for fast tracking national significance matters. However, we consider there is potential also for a “quality assured” hearing track to be applied to other major regional and district plan and resource consent hearings (as determined by the relevant council or elected by the applicant).

This would require:

Sufficient accredited independent commissioners, possibly selected from a regional pool appointed by the Minister. (We do not anticipate any problem in accessing the necessary skills.)

Provision for proper testing of the evidence, including cross examination of experts. (Call in and ERMA hearings show this is possible without unduly formalising proceedings.)

Proper recording of hearings processes. (Assuming the quality-assured track was confined, say, to plan hearings, designations and major resource consent hearings, we think the resourcing and cost implications of this would be manageable and would be more than offset by savings in appeal costs.)

With such quality assurance, appeals on these matters could be narrowed to whether the first instance decision is sound in legal and policy terms. We envisage that, for those matters not assigned the quality assured first instance hearing, the present “two shots on the merits” system could continue.

The range of things the “quality assured” first instance track applied to could be quite conservative initially. After an initial bedding-in period, though, it may well be possible to extend its application, for example to all regional policy statement and plan hearings, all designation hearings, and major consent applications.

Other measures to improve RMA hearings processes could include provision for security for costs in appeals, and the clarification of the scope of further information requests.

National has also signalled the possibility of inter-district plans and combined regional plans. We think this is worth pursuing. In addition to greater use of national standards, encouraging councils to work together would help avoid unnecessary duplication and differences in planning approaches. The combined Wairarapa proposed district plans, for example, provide for a single industrial hub for several districts and greater scope for integration between land use development and infrastructure provision.

Another sensible reform in this area would be to require councils to put their policy statements and plans on the internet in such a form that the Ministry for the Environment can provide a readily searchable, central and up-to-date database.

Part 2 of the Act

Previous RMA reforms have avoided any significant change to the purpose and principles of the Act in Part 2. Where change has been made it has been to add further matters to the “matters of national importance” in section 6, and other matters in section 7.

The consequence is rich veins of hotly contested RMA “values”. A lack of clear NPS direction from central Government has meant a high degree of investment uncertainty and lengthy first instance and appeal hearing contests. Value judgements have been required but the Court has only limited ability to make these with any strategic frame of reference.

We consider that some fine tuning of the matters listed in sections 6 and 7 should be considered as part of the first 100 days’ reform. In particular, there would be value in ensuring that outstanding landscapes and natural features, natural character of the coastal environment, amenity values and quality of the environment were provided for as far as possible in national and regional policy statements and in regional and district plans. These matters should not be left to individual resource consent processes.

Getting engaged

The Minister has announced a Technical Advisory Group to look at the reform proposals. The Group is chaired by barrister Alan Dormer and includes members with significant practical experience. The Minister has asked for ideas on how to improve the RMA to be sent to rmareview@mfe.govt.nz by 20 December 2008. The Group is due to report with recommendations by the end of January 2009. A Bill is then expected to be introduced by the end of February. Following five rounds of previous reform, it is important that this most significant reform to date hits the mark. You have the opportunity to assist in that by effective engagement.

Footnotes

Dr Patrick Strange, Transpower Chief Executive and Convenor of the Winter Power Group, 17 July 2008.